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Ascend Consultancy Weekly Team Perspective: Airline failures – opportunity for some?


Chris Seymour, Head of Market Analysis at Cirium Ascend Consultancy, reviews what capacity has become available through recent airline failures.

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Chris Seymore aviation market analysis

By Chris Seymour, Head of market analysis, Cirium Ascend Consultancy

The recent failure of Australian low cost carrier Bonza, after less than 18 months of flying, highlights the fragility which startups can face in their first years. In an environment of delivery delays and capacity squeeze, airline failures can provide other airlines with opportunities to add capacity at short notice by leasing aircraft which suddenly become available. What is the recent experience?

Over the past 18 months, since the start of 2023, looking at operators of the popular A320 and 737 family aircraft in particular, 18 carriers operating 177 aircraft have suspended or ceased operations.

To date, some 50 of these aircraft, or just under 30%, have returned to service, while only three have been parted out.

Bonza’s four leased 737-8s have ferried to Europe awaiting new lessees. With lessors accounting for over three quarters of the 177 total, returning aircraft represent a problem in dealing with the cost of an unexpected return, but also an opportunity to place with a better credit at increased rates in a capacity constrained market.

It has averaged around 120 days to get these 50 aircraft placed and back in service and the average age of these aircraft is around 8 years.

When Norwegian low cost airline Flyr ceased at the start of 2023, its six Max 8s were idle for only around seven weeks before rival Norwegian snapped them up; and its six 737-800s took a little longer but are all flying, most with Jet2.

The Colombian market saw the cessation by Ultra Air and then Viva Air in March-May 2023, putting 29 A320s into the market. All but one are back in service, these have averaged 144 days to place and the majority have stayed in the local market with Avianca and LATAM Airlines Colombia, thereby minimising the cost of transition for the lessors.

A320s and 737s from ceased/suspended operations – current status

A320s and 737s from ceased/suspended operations – current status
Source: Cirium Fleets Analyzer (data since Jan 1 2023)

MYAirline in Malaysia ceased last November but six of its ten mid-life A320s averaged just 90 days before re-entering service, with Air Asia, GlobalX and Corendon Dutch, while three others are placed with IndiGo and Vueling and due to re-enter service.

So what of the remaining 120 aircraft, which have an average age of 13 years and are averaging 267 days inactive to date?

Cirium Fleets Analyzer records only 11 as being placed to date. These include five of nine leased 737-8s with Lynx Air, which stopped in February, going to fellow Canadian carrier WestJet. Six young A320s returned by Pacific Airlines of Vietnam after it suspended flights in March have yet to find new homes.

54 aircraft (44%) are from the fleet of GoFirst of India, perhaps the highest profile casualty, which suspended flying in May 2023.

With an average age of under 5 years and all but five being A320neos, these are obvious candidates for quick placement.

But the drawn out process the lessors are having to go through to get them back, with courts ordering deregistration only last month, as well as issues with the GTF engines, mean that they all remain parked, frustratingly as the peak 2024 season is in progress.

At the other end of the spectrum, the 30-strong fleet of charter carrier iAero Airways of North Carolina, which entered Chapter 11 and stopped flying in April, average almost 30 years old, being mainly 737-300/400s. Eastern Air Express has acquired these assets.

So there is limited availability of young and newer generation aircraft available in the short term, with the prospect of the GoFirst fleet coming back into service in the coming year(s). Most recently the failure of Air Vanuatu has seen a young 737-800 returning to its lessor and one would expect that to be quickly placed.

LEARN MORE ABOUT CIRIUM FLEETS ANALYZER.

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